A new report on life expectancy suggests that the UK’s state pension age may need to increase to 70 or even 71 to accommodate the growing number of pension claimants. The Department for Work and Pensions (DWP) has already set the pension age at 66, with plans to raise it to 67 between 2026 and 2028. But, as life expectancy increases, the need for a higher pension age is becoming more evident.
According to the report by the International Longevity Centre, the rising number of people living longer, combined with an aging population, means that pension funds are under pressure. The state pension is predicted to rise significantly in the coming years, with an additional 2 million people expected to claim it within the next eight years. By mid-2032, more than one in ten people in the UK will be aged 75 or older, compared to about one in eleven in 2022.
There are concerns that an increase in the state pension age could lead to more financial challenges for workers nearing retirement, particularly as many younger people are hoping to retire earlier, with those aged 18-29 aiming to retire by 61. However, the reality for many is that retirement may seem out of reach financially. A significant 27% of people planning for retirement feel they won’t be able to retire as they once hoped, with many worried about how to afford their future.
The gap between those who have already retired and those planning for retirement in the future is widening. Experts, including Pete Glancy from Scottish Widows, warn that future pensioners might not have enough savings to ensure the quality of life they hope for in retirement. The report also highlights a worrying trend of declining life expectancy in recent years, with men’s life expectancy dropping by 1.7 years in England and women experiencing a more significant decline.
Given the shifting demographics and financial concerns, the debate over raising the pension age continues to be a hot topic. With an aging population and rising pension costs, is raising the state pension age to 71 a necessary step? How do you feel about this change? Should the government take action now to address the future sustainability of the pension system, or should the retirement age remain as it is? Have your say, for more information click here.
